Currently, in the year 2018, pension plans are almost extinct for those outside of public service. Our parents and grandparents may have put in 40 plus years at the same employer, to be rewarded with a fat pension at retirement. Nowadays this is extremely rare. There are few pension plans to keep us millennials loyal to our employers, and jumping companies every few years has proven to be a great strategy to increase income.
When changing jobs one of the biggest mistakes I see people make is not negotiating the initial job offer they are presented. Now I first want to make a qualification that this is not really applicable to all jobs (especially those in public service) and is more for those who have at least a couple years of experience in their field.
All companies, even those that are non-profit, want to maintain a level of profitability. What person is going to pay $5 for a coffee when 99% of the coffee shops sell the same cup for $2? This is the same when employers are looking to potentially hire. They want someone who is qualified for the job, without paying more than they need to. For this reason, like when buying a home, the listed salary isn’t the end-all, be-all. Employers expect their potential hires to negotiate with them. Therefore, they aren’t going to offer top dollar right away.
To be able to negotiate a job offer, you need to do research. Google and your professional network are your best friends here. Google the position and try to find similar job postings that list a salary range. Utilize company review websites that also show average reported salaries. If you have people in your professional network that are knowledgeable about your industry, ask them what they have been seeing for a fair market rate for a specific position.
Now that you are armed with the information about what a similar position in your market should pay, you need to sell yourself. Some people are naturally good at this, and others who potentially suffer from impostor syndrome, need to practice. It might feel awkward, but you need to show the potential employer why you’re worth what you are claiming to be worth. Highlight all the times in your current role where you kicked ass. Present specific examples that you know will impress your potential employer. This will help them feel comfortable about raising their offer.
Don’t make this mistake
Potential employers love to ask what you are making currently in your role. NEVER disclose this, as you cannot benefit from it. Some states are even outlawing potential employers from asking this question. For example, let’s assume someone has spent four years working for a small, family owned business and has received a job offer from a large, multi-national company. Maybe the person in this role is making $45,000 per year, but as they work for a small company without a proper HR department, they could be paid well below market rate for that position. The large company asks what the person making. They reply they are making $45,000, so the company offers them $52,000 to seal the deal. The unsuspecting new hire is happy they are receiving a 16% raise, not knowing that all the other recent hires in the same position have been offered $60,000. Unfortunately, they were not since they shared their below market income with their potential employer.
When you do receive an offer make sure to consider all compensation, not just your base salary or hourly rate, when making your decision. Here is a list of potential compensation categories that need to be considered and evaluated: base salary, variable compensation (bonus), stock compensation, insurance (health, dental, vision, disability, life, etc.), retirement plans (401k, pension), flexibility (ability to work remotely, length and difficulty of commute), paid time off (vacation, sick time, maternity/paternity leave), ancillary benefits (cell phone, gym reimbursement, time off for charity work, sabbaticals), the level of stress, amount of hours, potential travel, etc. Ensure you are considering and evaluating all available information, to ensure you are making an educated decision and are negotiating with the most tools at your disposal.